VOICES: Challenging corporate America's hiring freeze
By Phil Mattera, Dirt Diggers Digest
Facing South
March 8, 2011
http://www.southernstudies.org/2011/03/voices-challenging-corporate-americas-hiring-freeze.html
You would never know it from the preoccupation with budget
deficits and the attack on public unions, but there is still
a severe jobs crisis in the United States.
The focus on the state and federal fiscal situation has
deflected attention from what should be a major scandal: the
failure of big business to accelerate hiring in step with the
emerging recovery in overall economic activity.
In recent weeks the dimensions of that scandal have become
increasingly apparent as corporations report lush earnings
for 2010 while hiring remains depressed. To highlight this
incongruity, I looked at the top 50 companies on the most
recent Fortune 500 list. Twenty-nine of them have recently
reported their annual profits while also disclosing the size
of their payroll as of the end of the fiscal year.
On the earnings side, it is truly fat city. The 29 posted
aggregate net income of $239 billion, a whopping 48 percent
increase from the year before. Oil companies, of course, are
raking it in. Exxon Mobil was up 58 percent and Chevron 81
percent. Service sector giants are also reporting much richer
bottom lines. UPS showed an increase of 62 percent and AT&T
63 percent. Some blue chip industrials more than doubled
their earnings. Boeing soared 152 percent and Ford Motor 141
percent.
By contrast, the employment figures are pitiful. Together,
the 29 corporations reported a decline of about 3,500
positions in their aggregate head count of some 4.6 million.
While most of the companies showed little change -- and some
banks increased their hiring a bit -- a few of the corporate
giants slashed payrolls. Telecommunications behemoth Verizon
Communications reduced its workforce by 28,500 jobs while
boosting its profits more than 13 percent. General Electric,
whose CEO Jeff Immelt is advising the Obama Administration on
job creation, got rid of 17,000 net positions during 2010
while enjoying a 6 percent rise in earnings. (GE is one of
the few companies that provide a geographic breakdown of
their workforce. In the U.S. GE's head count was down by
1,000.)
It's interesting that the percentage decrease in head count
at Verizon and GE is almost identical to the percentage
increase in profits at each of the companies.
Given these numbers, why is big business facing little
criticism for its hiring freeze? There is a tendency to
regard even large corporations as helpless in the face of
economic conditions, and they are not expected to resume
hiring until the market mandates it. Yet the overall economy
is picking up and still there is a resistance to hiring.
Corporate apologists such as the U.S. Chamber of Commerce
would have us believe that the reason is excessive workplace
regulation. The Chamber has just come out with a report
making the preposterous claim that if state governments would
only curtail their employment rules to the lowest common
denominator, 746,000 new jobs would magically materialize.
A major reasons hiring is anemic is that workplace rules --
and union presence -- are too weak rather than too strong.
Companies can do more business and garner more profits
without increasing their head count largely because there is
nothing stopping them from squeezing more work out of the
same number of employees. Stricter protections and more
collective bargaining would result in higher employment
levels.
One of the favorite policy prescriptions for high joblessness
is to offer tax credits to companies to hire more people. The
existence of those programs at the state and federal levels
is, however, contributing little to job creation.
Rather than thinking up more incentives, perhaps we should
create a disincentive for corporations to continue their
hiring boycott. There is a growing awareness these days that
big business is not paying its fair share of taxes. We could
begin to address this problem by creating tax penalties for
profitable companies that refuse to use their earnings to
alleviate understaffing.
Pressuring corporations to do more hiring would not only
improve life for the overworked employed and reduce the ranks
of the unemployed. The additional tax revenue that comes in
-- whether from the penalties or the withholding paid by the
newly hired -- would also alleviate the state and federal
fiscal crunch and make it easier for us to ignore those who
insist that cutting the size of government is the solution to
everything.
[Philip Mattera is Research Director of Good Jobs First and
Director of the Corporate Research Project. Phil has been
doing strategic corporate research for labor, environmental,
public-interest and other activist groups around the country
for the past two decades. Before that he spent a decade as a
business journalist. He is a licensed private investigator
and the author of four books on business, labor and economics
He is a long-time member of the National Writers Union and
serves as the union's chief book grievance officer.
His blog on corporate research and corporate misbehavior
is the Dirt Diggers Digest.]
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